Advice on Getting Car Loans in Australia

Buying a new car is exciting, but it should also be a well-planned and sensible financial decision. If you're buying a fairly new car, you'll probably need a car loan to pay the purchase price.

At the moment, car loans in Australia have interest rates at an all-time low, so it is a good time to lock in a low rate if you're considering buying a car.

Your car loan can significantly affect the total amount that you pay to buy the car, as it includes fees and interest that covers the cost of borrowing. With new lenders and products entering the market and competing with the big banks, getting the right car loan advice is essential to ensure your money remains in your pocket.

If you're ready to get started, you can apply for a car loan online with the assistance of an experienced lending specialist. The car loan approval checklist gives you an express guide on what you'll need to secure a fast car loan approval.

Otherwise, read on below to learn more about getting the right car loan advice in Australia.

How does car finance work?

Car finance allows you to purchase a vehicle, using regular weekly or monthly payments, for a cost.

What type of car loan should you get?

There's a number of different car loan types that you can select, depending on your specific use case.

An individual looking for a car loan will consider different car loan options than an ABN holder or a business. Choosing the best car loan can be a challenge, and getting car loan advice from a broker can help you to understand what all the options are and how they'll affect your finances.

If you're running a small business, your considerations will be different again. Remember, it pays to run your options past your accountant before committing to a loan contract, to ensure that you're business is getting the best value for money.

What laws apply to car loans in Australia?

When you take out car loans in Australia, you are protected from unethical behaviour by legislation. If you are taking out a personal car loan, your contract must comply with the National Consumer Credit Code (NCCP), which contains extensive protection of consumer rights.

A business or commercial car loan doesn't fall under the NCCP, so you'll need to exercise caution when taking out a commercial car loan. Read your credit contract before signing it, and ask if you have any questions about your rights and obligations under the contract.

What documents will I need to apply?

To be assessed for a car loan, your lender or broker will need specific documentation relating to your employment, credit history, residential situation and identification.

Having this documentation ready when you start your online application will mean that you'll get a faster assessment and approval.

Should you use a bank or a dealer for your car loan?

There are three main places you can apply for car finance. You can go directly to your bank or another lender, you can take car finance through a car dealership, or you can use a car loan broker to compare a variety of options within the car finance market.

What will a broker ask me?

Your car loan broker will ask you questions about your income, expenses and living situation to identify the surplus income that you have available to put towards car loan repayments. With this information and your credit score, they can recommend loan products that are suitable for you.

What should I ask my broker?

If you need car loan advice, never hesitate to ask your customer service contact for more information. No question is too silly, and since you're signing a legal contract and paying for your loan through fees and interest, it's important that you understand what the costs are and how your loan works.

What should a broker fee be?

Lenders and car loan brokers do charge a fee for administering your car loan. This fee will usually be similar to the application fee you'll pay directly through the bank. If you have any questions about the fees that will be included in your loan, ask your broker to explain them to you.

Can I buy a car privately using a car loan?

You can buy a car at private sale using a car loan. You'll need to allow a little extra time to arrange the settlement and a cooperative vendor.

With the right car loan advice, you can take steps to minimise the risks of buying a car privately and follow the guidelines for a smooth private sale with.

What rates and fees will apply to my car loan?

There are costs associated with taking out a car loan. Here's exactly what you can expect, and how to check your car loan contract to ensure there are no hidden fees and charges.

Where should I buy my car?

Once you have a car loan pre-approval, it's time to find the car that you'll purchase. There's a range of options, including buying brand new or second hand through a dealer, buying at auction or private sale.

Getting the right car loan advice can save you thousands of dollars in interest and fees, so when you take out your next car loan, seek the advice of a lending specialist to find out about new loan products that can save you money on your vehicle purchase.